Saccharomyces cerevisiae CGR1 encodes a conserved fungal protein that localizes to the nucleolus. To determine if this localization reflects a role for Cgr1p in ribosome biogenesis two yeast cgr1 mutants were examined for defects in ribosome synthesis: a conditional depletion strain in which CGR1 is under the control of a tetracycline-repressible promoter and a mutant strain in which a C-terminal truncated Cgr1p is expressed. Both strains had impaired growth rates and were hypersensitive to the aminoglycosides paromomycin and hygromycin. Polysome analyses of the mutants revealed increased levels of free 40S subunits relative to 60S subunits, a decrease in 80S monosomes and accumulation of half-mer polysomes. Pulse-chase labelling demonstrated that pre-rRNA processing was defective in the mutants, resulting in accumulation of the 35S, 27S and 7S pre-rRNAs and delayed production of the mature 25S and 5 small middle dot8S rRNAs. The synthesis of the 18S and 5S rRNAs was unaffected. Loss of Cgr1 function also caused a partial delocalization of the 5'-ITS1 RNA and the nucleolar protein Nop1p into the nucleoplasm, suggesting that Cgr1p contributes to compartmentalization of nucleolar constituents. Together these findings establish a role for Cgr1p in ribosome biogenesis.